SHANGHAI, Oct. 11 (SMM) – 50% of the surveyed aluminum plate, sheet, strip and foil producers saw little changes in inventories of finished goods in September, 20% reported higher inventories and the rest 30% posted decreases, according to SMM’s survey.
SMM attributes higher inventories in September to delayed shipments from traffic congestion during the Chinese holidays, reduced orders from end users and extended delivery due to cash tightness among downstream producers. Confronted with sluggish orders and low profit margins, processors must reduce inventories of raw materials, semi-finished and finished goods in order to lower operating costs. With the upcoming loan repayment peak in October, increased inventories will only aggravate tight cash flows and operating risks.
Pressure from high inventories may be eased after the Chinese holidays as aluminum plate, sheet, strip and foil producers are actively moving goods.